Netflix Gains as Bearish Analyst Says to Buy the Shares

By Cliff Edwards -
Jan 18, 2013

Netflix Inc. (NFLX), the largest
subscription-video service, rose as much as 4.3 percent after a
Wall Street analyst reversed his negative view of the company
and recommended buying the shares for the first time.

The Los Gatos, California-based company rose 2.7 percent to
$100.31 at 1:38 p.m. in New York and after reaching $101.94.
Tony Wible, an analyst with Janney Montgomery Scott in
Philadelphia, told investors today the shares may rise to $129,
citing improving fundamentals and few signs of a threat from
competition. He had rated it “sell” or “hold” since 2007.

In December, Netflix signed an exclusive agreement to
stream new Walt Disney Co. (DIS) releases, including those from Pixar
and Marvel, beginning in 2016. Chief Content Officer Ted Sarandos said then that the company would bid for Sony Corp. (6758)
studio content. The company also built a “content delivery
network” to help improve the streaming quality of Netflix
movies and television shows across Internet networks.

“Recent developments, including the Disney deals, the
potential for a Sony deal, and the new CDN platform, are
changing how studios, cable companies and investors approach the
company,” Wible wrote in the research note.

Competitive threats from streaming rivals such as
Amazon.com Inc. (AMZN), Hulu LLC and Redbox Instant by Verizon haven’t
materialized to the extent he had feared, Wible said.